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This company designs, manufactures, services, sells and rents/leases downhole drilling tools for oil well and construction businesses. Established in 2011 by prior electrical engineer for a large EPC corporation, this company is known for providing a complete line or proprietary drilling motors, as well as manufacturing space parts for directional companies and competitors products.
Sales reached over $14M in 2018, with EBITDA in excess of $2.3M. Early 2019 was also the beginning of the most significant reduction of land drilling rigs, which has obviously continued to decline throughout 2020. The rig count has only recently begun to increase and is expected to continue to increase assuming crude prices remain around $40/bbl. This is an excellent opportunity for new ownership to capitalize on the regrowth of operational drilling rigs and reap the benefits of future potential at a bargain price. Includes $2.5M in motor parts inventory at cost.
In addition to the business for sale in the amount of $7.9M, the custom purpose built facility, in excess of 27,000 square feet, in addition to upstairs living space, is available for sale for $3M. This impressive building includes a service center equipped with two overhead and two job cranes which support four breakout machines and two hydraulic vices. Located on 6 acres.
27,400 sq ft plus living space built out upstairs, situated on 6 acres. Seller prefers to sell real estate and not lease.
In addition, the many small competitors they see in the market are too small and don't maintain the reserves necessary to weather the drops in oil prices and rig counts, and now with the pandemic this has become even more evident. This company has the capacity to be ready when the market swings up and poised to grab an increased market share.
The oil well drilling service business is very competitive and is dominated by super industry majors such as NOV Baker Hughes, etc. Company occupies a niche for which the majors are unable to fill due to response time. Historically, they have failed to take advantage of growth opportunities due to lack of personnel required to support an expanded product line, therefore, expanding the inventory and selection of power sections to meet the ever changing requirements of the drilling engineers as well as introducing tools to support new drilling requirements is a critical focus for a new owner to exponentially grow the business.
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